How PFL Laws Help Women Stay in the Workforce

May 14, 2020
Photo of a mom with her child

Do paid family leave laws help women stay in the workforce? Yes! A recent study shows that PFL laws can dramatically lower the number of women who drop out of the workforce after having a baby.* Funded by the March of Dimes and conducted by the Institute for Women’s Policy Research, the study showcases PFL’s positive, long-term impacts.

Labor Market Participation
(ages 25 — 54)
Women75%
Men89%

Workforce Facts: Women vs. Men

Helping women stay in the labor market is essential, because fewer women than men take part in it to begin with. Among prime-age workers (aged 25-54) in the U.S., women's labor market participation is only 75%, compared with 89% for men. That 75% includes women working full-time and part-time, plus those who are unemployed but seeking work.

Job Protection: Many Can’t Count on FMLA

Access to job-protected leave — or the lack of it — is a big factor for many women. In the prime-age category, fewer than 60% of all workers have access to the Family and Medical Leave Act. Known as the FMLA, it requires certain employers and all government agencies to provide 12 weeks of leave for childbirth, adoption or the serious illness of oneself or a close relative.

The FMLA looks strong at first glance. But because the leave is unpaid, many workers can’t afford to take the time off, even if their jobs are protected.

CA and NJ: Evidence That PFL Pays Off

This study focused on two key states with long track records for job-protected leave. California, which enacted its Paid Family Leave Program in 2004. And New Jersey, which followed in 2009 with its Family Leave Insurance Program.

  • California PFL Details:
    • Employees receive up to 70% of their weekly wages earned during the base period, up to $1,300 per week.
    • Six weeks of paid leave to bond with a new child — which will increase to eight weeks on July 1, 2020.
  • New Jersey PFL Details:
    • Employees receive up to 66.67% of their average weekly wage, up to a maximum of $667 per week. The maximum weekly benefit will increase to $881 on July 1, 2020.
    • Six weeks of paid leave to care and bond with a new child (for the first year) — which will increase to 12 weeks on July 1, 2020.

The study examined labor market participation among women in these states before and after they implemented paid family and medical leave systems.

The Results: PFL Helps Retain Talent Over Time

State Offers Paid Parental Leave?
Yes20% fewer women leave their jobs in the first year after having a baby.
Yes50% fewer leave in the 5 years following a new child.
NoNearly 30% drop out of the workforce within the first year after a new child.

The difference PFL can make is striking. The results from California and New Jersey show that in states with paid parental leave:

  • 20% fewer women leave their jobs in the first year after having a baby.
  • Workforce retention jumps to 50% in the five years following a new child.

The impact of PFL was especially high for women with higher levels of education. Their labor force participation increased for up to eight years after birth. One potential reason? More highly educated workers may have more access to job-protected leave through the FMLA. The results indicate that PFL is important for ensuring that the most educated workers continue to take part in the workforce.

What about states without paid family leave?

The study found that a lack of PFL leads to fewer moms continuing to work:

  • Almost 30% of women who don’t have access to PFL will drop out of the workforce within a year after welcoming a child.
  • One in five women will not return for over a decade.

Closing the Gap: Economic and Health Benefits

It’s clear from these results that PFL helps close the gap in workforce participation between moms of young children and women without minor children. The economic payoff that PFL provides also lasts beyond the actual benefit checks a new mom receives.

PFL helps give women more choices. In a lot of U.S. households, new moms are expected to step away from work, at least temporarily. When women can count on receiving PFL benefits, there’s less financial impact to their families. And they’re much more likely to return to work.

Dr. Rahul Gupta, chief medical and health officer, senior vice president of March of Dimes, summed up the value of PFL. “This research is yet another proof point of the value of paid family leave, which not only benefits the economy and family finances, but the health of moms and babies — including lower rates of neonatal and infant death.”

Dr. Gupta’s recommendation? “More states must follow the lead of California and New Jersey.”* To see the progress other states are making, check out our 2020 PFL Rundown. You can also refer to our interactive PFL map.

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* New Study Reveals Paid Family Leave Policies Lead to 20% Fewer Women Leaving the Workforce, March of Dimes, Jan. 3, 2020

 

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Demographic Perspectives